3 ms·

There is a significant time value of money effect at play here - better to get the tax advantages from writing the investment off in Year 5 than getting paid ba

There is a significant time value of money effect at play here - better to get the tax advantages from writing the investment off in Year 5 than getting paid back in Year 12

karthikb 7y ago
They can always sell the shares back for a dollar and do the write off whenever they want.
- frenchman99 7y ago
  If someone wants to buy the shares... even if the company is running well, if the founder has 51%, they might have no incentive to buyback.
  - sokoloff 7y ago
    Is there a founder in the world of a company that's running well who wouldn't buy back 49% (or 9% or 79%) of their shares for a dollar per investor?
    - karthikb 7y ago
      Exactly. And if in 2-3 years the company is doing spectacularly well it’s now additional headroom to raise without losing control.
      - sokoloff 7y ago
        Heck, it's worth more than a dollar to not have to send an investor update or answer a resulting question.